As discussed in a prior blog post, in May of this year, the Department of Justice (DOJ), through its Fraud Section and in conjunction with the Center for Program Integrity, Centers for Medicare & Medicaid Services (CPI/CMS), began prosecuting defendants who were alleged to have perpetrated a variety of COVID-19-related scams on federal healthcare programs.  On September 17, 2021, the DOJ’s Health Care Fraud Unit, in coordination with its Health Care Fraud and Appalachian Regional Prescription Opioid Strike Force, the Department of Health and Human Services Office of Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI) and the Drug Enforcement Agency (DEA), announced a new wave of enforcement actions against 138 individuals, including 42 licensed medical professionals, alleged to have participated in health care schemes that resulted in $1.4 billion in alleged losses.

Similar to the initial round of criminal charges, the vast majority of the alleged fraud (more than $1.1 billion) centered on the misuse of telemedicine, with charges brought in 11 judicial districts against more than 50 defendants.  This massive increase in telemedicine enforcement reflects a coupling of the rise in care being delivered via telemedicine and the success of the Fraud Section’s National Rapid Response Strike Force, created in 2020 with a focus on telemedicine fraud, fraud involving substance abuse treatment facilities (also known as “sober homes”) and illegal opioid distribution schemes.  An additional $29 million in false billings was tied to charges against nine defendants who allegedly profited off of the pandemic through a variety of health care fraud schemes.  Two defendants charged in the Southern District of California pled guilty to offering residents of senior living facilities in El Centro and Calexico, California COVID-19 screening tests that the defendants knew were general respiratory pathogen screening panels along with urine tests, resulting in the submission of inaccurate and medically unnecessary claims to Medicare.

In addition to testing and telemedicine-related schemes, the September 17^th announcement also included five more criminal charges alleging improper use of monies received in connection with the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s Provider Relief Fund (PRF), claims alleging $133 million of fraud related to sober homes, and more than $160 million related to opioid distribution schemes.  The sober homes cases involved illegal kickback or bribery schemes involving referrals of patients to substance abuse treatment facilities, resulting in medically unnecessary drug testing and billed for but not provided therapy sessions.

We will continue to monitor the ongoing enforcement priorities of the DOJ with regard to telemedicine and COVID-19 related fraud, as we expect continued focus on fraudulent schemes that take advantage of the ever-expanding delivery of remote medical services and the uncovering of abuse related to COVID-19 testing and care.